Buying a house means making many decisions. Before you set out on your own to do it, you should determine if you need a realtor. There are pros and cons to using someone to represent you in your purchase. We discuss them below to help you decide what’s right.
What Does a Realtor Do?
First, let’s look at what a realtor does for you. As the buyer, the real estate agent combs through the MLS listings to find the homes that may interest you. They do this after consulting with you regarding the features you are looking for. A skilled real estate agent will ask you the right questions to help pinpoint which homes are worth your time to look at and which ones are not.
The realtor does more than show you listings, though. They can use their expertise to help you understand the true state of a home. They know the keywords sellers use in their listings and can often read through them to truly understand the condition of the home before they even step foot inside.
When you look at homes, the realtor will give you an unbiased and professional opinion on what he thinks. You can then decide for yourself if it’s the right home or not. If it is, you will submit your bid through the real estate agent who will handle all of the negotiations and paperwork for you. The only thing you have to do is sign the purchase contract after everything has been negotiated and accepted.
The Pros of a Real Estate Agent
You’ll See More Houses
If a seller lists a home with a real estate agent, you cannot see the home without an agent on your side. Sure, you have the choice to use the seller’s agent, but that’s not always the best choice. When the realtor represents both you and the seller, he has to take sides at some point. Your best interests might not be represented. Without your own realtor, though, you won’t have access to the houses on the MLS listing, leaving you with only the homes for sale by owner.
You’ll Get Expertise
This is probably the largest benefit of using a realtor. Navigating the purchase process on your own can be a nightmare, especially if it’s your first home purchase. Your real estate agent can answer questions about the homes, the sales process, and even your financing. They are a jack-of-all-trades, helping you get through the home buying process and even handling the negotiations for you.
You’ll Learn About the Neighborhood
When you use a realtor that knows the local area, you’ll have the benefit of learning about the area. The right real estate agent will be able to let you know what the area is like and what you should know about it. Think of things like major weather disasters or a series of thefts. These things can inflate the cost of your homeowner’s insurance or even make you ineligible or insurance in the first place. Having the expertise of the agent can help you prevent getting into such situations.
You Don’t Pay for It
Despite all of the benefits the realtor can provide, you don’t pay for his services. That’s the seller’s job. This almost makes it a no-brainer to use one. The seller pays the seller’s agent who then shares the commission with the buyer’s agent. It’s a costly expense for the seller, but it’s one you can take advantage of as the buyer.
The Cons of a Real Estate Agent
You Might Pay More for the House
While it’s true that the seller pays the realtor’s commission, they usually build the commission into the price of the home. The seller might be less willing to accept a lower bid because they know they have to cover the 5%-6% commission. This might leave you paying more for the house than you anticipated.
You Can’t Work on Your Own Timeline
Using a realtor means you can’t see homes without your real estate agent in tow. Chances are you are not his only client, which means you have to work on his schedule. If your schedules doing coincide, it could make it hard to see a specific home. If it’s a hot market or the home is in high demand, you could lose your chance to throw in your own bid if this happens.
You May Need a Contract
Depending on the agent, you may have to sign a contract. The contract may contain details about the commission the agent will receive or about working with him exclusively. It basically protects the agent, but you should make sure you read the fine print to make sure you understand what you are agreeing to.
Working with a realtor has many advantages. Even though you might pay more for the house and you have to work on someone else’s schedule, it helps you know what you are getting yourself into. As with anything else, make sure you shop around to ensure that you are working with a reputable agent. Ask for referrals and read reviews online to make sure the agent you choose is reputable, legitimate, and effective.